Opinion
D069178
04-26-2017
WEST COAST GENERAL CORPORATION, Plaintiff and Appellant, v. CITY OF SAN DIEGO et al., Defendant and Respondent; USS CAL BUILDERS, INC., Real Party in Interest and Respondent.
Finch, Thornton & Baird, P. Randolph Finch Jr., Dustin R. Jones, and Mary Kathryn Ross for Plaintiff and Appellant. Jan I. Goldsmith, City Attorney, Daniel F. Bamberg, Assistant City Attorney, and Michael J. McGowan, Deputy City Attorney, for Defendant and Respondent City of San Diego. Feldman & Associates, Mark A. Feldman and Adam H. Meyers, for Real Party in Interest and Respondent USS Cal Builders, Inc.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2015-00027657-CU-WM-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Timothy Taylor, Judge. Affirmed. Finch, Thornton & Baird, P. Randolph Finch Jr., Dustin R. Jones, and Mary Kathryn Ross for Plaintiff and Appellant. Jan I. Goldsmith, City Attorney, Daniel F. Bamberg, Assistant City Attorney, and Michael J. McGowan, Deputy City Attorney, for Defendant and Respondent City of San Diego. Feldman & Associates, Mark A. Feldman and Adam H. Meyers, for Real Party in Interest and Respondent USS Cal Builders, Inc.
The City of San Diego (City) awarded the low bidder, USS Cal Builders, Inc. (USS), a contract for road improvements after a public bidding process. The second lowest bidder, West Coast General Corporation (West Coast), petitioned for a writ of mandate seeking to compel the City to set aside this award. West Coast alleged the City had no authority to accept USS's bid because the bid did not initially include price information for two subcontractors. The trial court denied the writ petition.
West Coast appeals. We affirm. The record shows USS provided the City with the missing information on the same day of the bid deadline and about 35 minutes after the City notified USS of the omission. The added subcontractor information did not change the total bid price or affect USS's low bidder status. There is no showing the City's actions provided USS with any competitive advantage. On this record, West Coast did not meet its burden to show the award to USS was improper.
FACTUAL AND PROCEDURAL SUMMARY
In May 2015, the City solicited bids for a public works project for road improvements on Old Otay Mesa Road. The bids were due at 2:00 p.m. on July 1, 2015. The bid solicitation contained a page titled "LIST OF SUBCONTRACTORS" (Subcontractors Page) that required bidders to provide information about each subcontractor that would perform work on the project. The requested information included: (1) the subcontractor's name, address, and telephone number; (2) the constructor or designer; (3) the subcontractor's license number; (4) the type of work; (5) the dollar value of the subcontract; (6) any minority/women/veteran-owned certification; (7) subcontractor certification information; and (8) the existence of any joint venture partnership. On the fifth category (dollar value), the bid solicitation stated in red "(MUST BE FILLED OUT)." No other category included this admonition.
On the top of this page, the instructions stated:
"In accordance with the requirements provided in the 'Subletting and Subcontracting Fair Practices Act', Division 2, Part 1, Chapter 4 of the Public Contract Act, the Bidder shall list below the name and address of each Subcontractor who will perform labor, render services or specially fabricates and installs a portion . . . of the work or improvement, in an amount in excess of 0.5% of the Contractor's Total Bid. The Bidder shall also list below the portion of the work which will be done by each subcontractor under this Contract. The Contractor shall list only one Subcontractor for each portion of the Work. The DOLLAR VALUE of the total Bid to be performed shall be stated for all subcontractors listed. Failure to comply with this requirement shall result in the Bid being rejected as non-responsive and ineligible for award. [¶] . . . Subcontractors' License Number must be filled in. Failure to provide the information specified may deem the bidder non-responsive."
The City opened the bids at 2:00 p.m. on the deadline date, July 1, 2015. USS was the low bidder at $8,953,829.50. On the Subcontractors Page, USS identified 10 subcontractors (using five pages to do so). For eight of those subcontractors, USS provided all requested information on all categories. For the other two subcontractors, USS provided all requested information on all categories, except for the fifth category ("Dollar Value of Subcontract"). Those spaces were left blank.
Two hours after the bid opening, at 4:05 p.m., the City sent an email to USS stating that USS had omitted the subcontractor dollar value information for two subcontractors, and asked USS to provide the information no later than 2:00 p.m. the next day. The email stated: "As per CA Public Contract Code §4100 and [the Subcontractors Page,] [¶] . . . [p]lease provide me the missing information . . . by 2:00 PM Thursday, July 2, 2015." Thirty-five minutes after receiving this email, at 4:40 p.m., USS emailed the City a revised Subcontractor Page that was identical to the submitted form, except that it contained the previously omitted subcontract price amounts for the two subcontractors. There were no other changes to the bid, including to the total bid amount.
The next day, West Coast (the alleged second lowest bidder at $9,976,271.50) notified the City it believed the USS bid was nonresponsive because USS had omitted the subcontractor-price information.
Several days later, the City responded that the missing dollar values had been cured and thus the omission was not a legal basis to dispute an award to USS. The City relied on Public Contract Code section 4104, subdivision (a)(3)(A), which (as discussed more fully below) provides a public entity with the discretion to allow a prime contractor "up to 24 hours after the [bid] deadline" to provide omitted subcontractor information, except for "the subcontractor's name, location of business, and California contractor license number."
All unspecified statutory references are to the Public Contract Code.
West Coast then filed a notice of intent to protest the City's selection of USS as the successful bidder. West Coast argued primarily that the omission of the subcontractor prices rendered the bid legally nonresponsive and the City had no authority to allow USS to cure this bid defect.
The City rejected these claims. The City reasserted that section 4104, subdivision (a)(3)(A) allows the City to permit the submission of missing information within 24 hours. The City also stated: "Although[ ] not stated in the bid instructions, the City has a policy of implementing this provision of the Public Contract Code. In fact, the City routinely informs bidders that they have 24 hours to provide any applicable missing subcontractor information upon receipt of bids. [¶] In this case USS . . . submitted the dollar value within 24 hours for the missing dollar values for the listed subcontractors as provided by . . . section 4104[, subdivision (a)(3)]."
Soon after, the City notified USS that it was the lowest responsive and responsible bidder based on the total base bid value and that it intended to award the project to USS.
West Coast then petitioned for a writ of mandate, alleging the City's acceptance of USS's supplemental price information was contrary to the bid documents and California law. Regarding the bid documents, West Coast alleged the written instructions defining a responsive bid to include subcontractor-price information prohibited the City from allowing USS to cure the omission. On the alleged violation of California law, West Coast claimed that by permitting USS to provide the supplemental information, the City gave USS the opportunity to engage in unlawful "[b]id chiseling," which it described as the practice in which a prime contractor uses a prime contract award "to pressure its sub-bidders to further lower their prices 'under threat of losing the work . . . to performance by the bidder's own forces.' "
The court issued an order temporarily enjoining USS from performing any work on the project, and setting a hearing on the merits one month later.
In their responsive papers, the City and USS argued that the City had the discretion to determine USS's bid was responsive based on USS's promptly curing the "inconsequential" deficiency in the bid. In support, the City submitted the declaration of Albert Rechany, the deputy director of the City's public works division, who stated in part:
"When the bids were opened on July 1, 2015, [USS] was the low bidder. However, information concerning pricing for some of their subcontractors was missing. [¶] . . . It is a standard practice in my Department, and has been since July 2014, for the Department to give bidding companies 24 hours after bids are opened to identify certain information missing from their bid. The City requests this missing information in accordance with the California Public Contract Code (PCC) and as a matter of general policy. This is so because the PCC specifically allows for a prime contractor bidding on a public works project to provide certain missing information about their subcontractors during a 24-hour grace period, per PCC section 4104 (a)(3)(A)."
"Further, the PCC only requires prime contractors bidding on a project to list the name, location of business, and the California contractor license number of each subcontractor who will perform work for the prime contractors, per PCC section 4104 (a)(1)."
"Obtaining missing information during this 24-hour grace period is in the best interests of the City . . . because it assists the City in obtaining the best possible value and best possible bid for public works projects. [¶] . . . To my knowledge, USS . . . did not go back to their subcontractors after the bid opening on July 1, 2015, and renegotiate their prices."
Additionally, USS submitted the declaration of its business development director, Rani El Djoundi. El Djoundi stated that on June 30, 2015, USS received bids from the two subcontractors whose prices were omitted from the bid documents. Each of these bids contained a price for the subcontractor work. The next day, on July 1, USS submitted its bid to the City without including the two subcontractor prices. Later that day, at 4:05 p.m. the City sent an email to USS requesting the subcontractor dollar values. After receiving this email, USS reviewed the Subcontractor Page, and "determined that it had omitted subcontract amounts" for the two subcontractors . . . . [¶] . . . At 4:40 p.m. [on that same date] [USS] replied to [the City] by email with an attachment of a revised form . . . that contained the two subcontract amounts that were omitted from [USS's] bid package." El Djoundi attached copies of the emails to the declaration.
In reply, West Coast submitted a declaration of its vice-president, Nicholas Walters, who stated that in his experience the City had never before permitted a public works contractor to supply missing information within a 24-hour period.
After considering the parties' papers and conducting a hearing, the court vacated the temporary restraining order and denied the writ petition, concluding that the City had the authority to waive an "inconsequential deviation from contract specifications or bidding rules." In its order, the court recognized the bid instructions required the dollar value of each subcontractor to be identified and stated a bid would be rejected as nonresponsive without this information. But the court noted it was "undisputed that the City notified [USS] of the shortcomings of its bid on bid opening day, and that within an hour [USS] had provided the missing information without changing any bottom line dollar amounts on its bid." The court also stated that West Coast "only points to the potential of 'bid chiseling,' but does not even begin to show that it occurred. Here, all that occurred was the slightly tardy listing of omitted [amounts]; no financial component of [USS's] bid was altered; nor was any other substantive aspect of the bid. How USS . . . could have engaged in any shenanigans in 35 minutes is never stated in the moving papers."
In reaching these conclusions, the court rejected West Coast's numerous evidentiary objections to the Rechany and El Djoundi declarations, and granted the City's requests for judicial notice of its municipal code provisions.
West Coast appeals.
DISCUSSION
I. Legal Framework
"Generally, cities, as well as other public entities, are required to put significant contracts out for competitive bidding and to award the contract to the lowest responsible bidder." (MCM Construction, Inc. v. City and County of San Francisco (1998) 66 Cal.App.4th 359, 368 (MCM).) The Public Contract Code contains requirements governing the bidding process. The code includes the Subletting and Subcontracting Fair Practices Act (the Act), which requires prime contractors to provide information about its subcontractors when it bids on a public contract. (§ 4100, et seq.) Under the Act, a general contractor submitting a bid on a public contract must list each subcontractor that will perform "in excess of one-half of 1 percent" of the total bid, and the business address and license number of each subcontractor. (§ 4104, subd. (a)(1).) "Once the general contractor's bid is accepted, . . . the general contractor has a statutory duty to use the listed subcontractor" unless a statutory exception applies. (E.F. Brady v. M. H. Golden Co. (1997) 58 Cal.App.4th 182, 188 (Brady); see § 4107.)
"The Legislature enacted this statutory scheme to address perceived problems with subcontractor financial solvency and the quality of subcontractor work on public projects. In particular, the Legislature wanted to (1) ensure the awarding authority would have the 'opportunity to . . . investigate and approve the initial subcontractors and any proposed substitutions' [citation] and (2) prevent 'bid shopping' and 'bid peddling' after the prime contract has been awarded. [Citation.] 'Bid shopping is the use of the low bid already received by the general contractor to pressure other subcontractors into submitting even lower bids. Bid peddling . . . is an attempt by a subcontractor to undercut known bids already submitted to the general contractor in order to procure the job.' " (Brady, supra, 58 Cal.App.4th at pp. 189-190, italics omitted.)
Section 4104 of the Act contains rules governing the situation when a prime contractor's bid omits requested subcontractor information. Section 4104, subdivision (a)(3)(A) states that if the prime contractor fails to list requested information about a subcontractor — other than the subcontractor's "name, location of business, and California contractor license number" — the prime contractor may submit the omitted subcontractor information "up to 24 hours" after the bid deadline. Section 4104, subdivision (a)(3)(B) provides that "A state or local agency may implement subparagraph (A) at its option."
San Diego is a charter city that has discretion to impose bid specification criteria different than state law. (§ 1100.7.) Under this authority, the City has declared that it "is expressly exempt from the California Public Contracts Code," but that the City will follow the applicable statutes in its discretion. (San Diego Mun. Code, § 22.3002, subds. (a), (b).) On the latter point, the San Diego Municipal Code section 22.3002, subdivision (b) states: "In the interest of ensuring an expeditious and fair procedure for administering the award of its public contracts, the City in its discretion may follow portions of the California Public Contract Code, but absent a judicial finding that a particular aspect of local public contracting is a matter of statewide concern, the City is not required to do so." Additionally, San Diego Municipal Code section 22.3014 states: "The City may waive defects and technicalities in bids or proposals when to do so is in the best interests of the City."
Under state law, a bidder is legally bound to its bid price (with certain narrow exceptions), but may withdraw a bid for an inadvertent clerical-type mistake. (§§ 5101, 5103; see Menefee v. County of Fresno (1985) 163 Cal.App.3d 1175, 1181.) To establish grounds for a withdrawal based on a mistake, the bidder must generally establish four elements: "(a) A mistake was made. [¶] (b) He or she gave the public entity written notice within five working days . . . after the opening of the bids of the mistake, specifying in the notice in detail how the mistake occurred. [¶] (c) The mistake made the bid materially different than he or she intended it to be. [¶] (d) The mistake was made in filling out the bid and not due to error in judgment or to carelessness in inspecting the site of the work, or in reading the plans or specifications." (§ 5103, italics added.)
On this issue, the San Diego Municipal Code rules are slightly different: "Any bidder who seeks to modify or withdraw a bid or proposal because of the bidder's inadvertent computational error affecting the bid or proposal price shall notify the City Department where bids or proposals were submitted no later than three working days following the bid closing. The bidder shall provide worksheets and such other information as may be required by the City to substantiate the claim of inadvertent error. Failure to do so may bar relief and allow the City recourse from the bid surety. The burden is upon the bidder to prove the inadvertent error." (San Diego Mun. Code, § 22.3013, italics omitted.)
II. Review Standards
An unsuccessful bidder may challenge a public contract award by bringing a mandamus action in the superior court. (See Konica Business Machines U.S.A., Inc. v. Regents of University of California (1988) 206 Cal.App.3d 449, 451.) " ' "Mandamus is an appropriate remedy to compel the exercise of discretion by a government agency, but does not lie to control the exercise of discretion unless under the facts, discretion can only be exercised in one way. . . ." ' " (Bay Cities Paving & Grading, Inc. v. City of San Leandro (2014) 223 Cal.App.4th 1181, 1187 (Bay Cities).) The petitioner has the burden to show the public entity abused its discretion in awarding the contract to the challenged bidder. (Ibid.)
Our review is the same as the review by the trial court. (Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897, 903 (Ghilotti).) We evaluate the public entity's factual determinations under a highly deferential substantial evidence test. (Bay Cities, supra, 223 Cal.App.4th at p. 1187.) We presume the public entity acted properly and must uphold its factual determinations unless the determinations " ' "were arbitrary, capricious, entirely lacking in evidentiary support or inconsistent with proper procedure. . . . We may not reweigh the evidence and must view it in the light most favorable to the [public entity's] actions, indulging all reasonable inferences in support of those actions." ' " (Ibid.) We exercise our independent judgment on "questions of statutory interpretation or to determine whether the [public entity's] action violated a relevant law." (Ibid.)
We are required to take a pragmatic view when considering a challenge to a public contract award. A public entity's decision " 'must be evaluated from a practical rather than a hypothetical standpoint, with reference to the factual circumstances of the case. [It] must also be viewed in light of the public interest, rather than the private interest of a disappointed bidder. "It . . . would amount to a disservice to the public if a losing bidder were to be permitted to comb through the bid proposal or license application of the low bidder after the fact, [and] cancel the low bid on minor technicalities, with the hope of securing acceptance of his, a higher bid. Such construction would be adverse to the best interests of the public and contrary to public policy.'. . ." (Bay Cities, supra, 223 Cal.App.4th at p. 1189.) As our high court recently underscored, "the competitive bidding laws were enacted for the benefit of the public, ' " 'not for the benefit or enrichment of bidders, and should be so construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest.' " ' " (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 521.)
III. Analysis of West Coast's Contentions
West Coast contends USS's bid was nonresponsive and could not be cured "[a]s a matter of law." In support, West Coast asserts two primary theories: (1) the omission of the two subcontractor prices was a nonwaivable material defect because it provided USS with an impermissible competitive advantage; and (2) the City's action in permitting USS to cure the subcontractor-price omission violated the City's own bid documents. For the reasons explained below, we find these contentions to be without merit.
A. Subcontractor Price Omission Did Not Provide a Competitive Advantage
" ' "A basic rule of competitive bidding is that bids must conform to specifications, and that if a bid does not so conform, it may not be accepted. [Citations.]" ' " (Bay Cities, supra, 223 Cal.App.4th at p. 1188.) However, " 'a bid which substantially conforms to a call for bids may, though it is not strictly responsive, be accepted if the variance cannot have affected the amount of the bid or given a bidder [a competitive] advantage or benefit not allowed other bidders or, in other words, if the variance is inconsequential. [Citation.]' " (Ghilotti, supra, 45 Cal.App.4th at p. 904.) A public entity's conclusion that a variance is material or inconsequential is a " ' "question of fact" ' " entitled to substantial deference. (MCM, supra, 66 Cal.App.4th at p. 375; accord, Bay Cities, supra, 223 Cal.App.4th at pp. 1187, 1189.)
West Coast contends the late subcontractor-price information was material in that it gave USS a competitive advantage by providing it the opportunity to (1) withdraw its bid without forfeiting its bid bond and (2) engage in "bid chiseling." These arguments are not supported by the record.
On the first point, the courts have recognized a bidder may gain an unfair competitive advantage if its failure to strictly comply with bid specifications would allow the bidder to withdraw without forfeiting its bid bond. (Ghilotti, supra, 45 Cal.App.4th at p. 900; Valley Crest Landscape, Inc. v. City Council (1996) 41 Cal.App.4th 1432, 1442 (Valley Crest); see also See Bay Cities, supra, 223 Cal.App.4th at pp. 1193-1199.) This is because other bidders with no mistakes cannot similarly "back out" from its bid after bid prices are revealed. (Valley Crest, at p. 1442.) But the courts have found a competitive advantage in this situation only if the bidder had an "actual" opportunity to withdraw its bid, not merely a conceivable ability to do so. (Bay Cities, at pp. 1196-1199; Ghilotti, supra, 45 Cal.App.4th at p. 912, fn. 6; see also Valley Crest, at p. 1442.) A bid competitor does not meet its burden to show an unfair competitive advantage by merely showing a potential basis for a bid withdrawal. (Bay Cities, at pp. 1196-1199; Ghilotti, supra, 45 Cal.App.4th at p. 900.)
Although Valley Crest suggested in dicta that a successful bidder's actual opportunity to withdraw was not necessary to establish a competitive advantage, the facts in that case showed that the public entity expressly gave the contractor the opportunity to withdraw its bid. (Valley Crest, supra, 41 Cal.App.4th at p. 1442 & fn. 1.) The courts have thus interpreted Valley Crest as supporting the "actual" opportunity rule. (See Ghilotti, supra, 45 Cal.App.4th at p. 912, fn. 6; see also Bay Cities, supra, 223 Cal.App.4th at p. 1198.)
In this case, West Coast does not point to any facts showing USS had an actual opportunity to withdraw its bid, i.e., that the City allowed USS to retract its bid without consequences based on the omitted information. Additionally, there were no potential grounds for USS to withdraw its bid on statutory "mistake" grounds as the undisputed record supports that the omission did not render the bid materially different than USS intended it to be. (See § 5103, subd. (c).) The total bid price and all of the other relevant components for determining a successful bid remained the same. USS thus could not have successfully withdrawn its bid under state law or the more stringent Municipal Code rules. (§ 5103; San Diego Mun. Code, § 22.3013.) On this record, substantial evidence supports the City's factual conclusion that the omitted information did not provide USS with an unfair competitive advantage.
On the second point (that the omission of the subcontractor prices led to "bid-chiseling"), this claim is not factually supported. As described by West Coast, "bid chiseling" refers to the prime contractor's use of a public contract award "to pressure its sub-bidders to further lower their prices 'under threat of losing the work [or a portion thereof] to performance by the bidder's own forces,' " quoting 1 Bruner & O'Connor on Construction Law (2012) section 2:67, footnote 4. (See Oakland-Alameda County Builders' Exchange v. F. P. Lathrop Construction Co. (1971) 4 Cal.3d 354, 357.) West Coast states that bid chiseling occurs when "a prime bidder . . . disclose[s] a sub-bidder's low bid to other subcontractors to obtain lower sub-bids."
We agree "bid chiseling" (also known as "bid shopping" or "bid peddling") was a primary target of the Act and is legally prohibited. (§ 4101.) But there is no evidence USS engaged in this practice. USS responded to the City's request for the missing subcontractor price information within 35 minutes. As the trial court found, it is not reasonable to conclude that USS engaged in unlawful bargaining with its subcontractors during this limited time period. Additionally USS's bid included each of its subcontractor's names, license numbers, and business locations. Once these matters were identified, there was no possibility of any post-award bid shopping or bargaining. Because USS was legally bound to use the identified subcontractors (absent a specific statutory ground for a substitution), USS had no leverage to "chisel" any bids. (See § 4107, subd. (a).) USS could not seek a lower price from another subcontractor, and the named subcontractors had no incentive to agree to reduce their price.
In its appellate briefs, West Coast relies primarily on MCM, supra, 66 Cal.App.4th 359, which upheld a public entity's decision to reject a low bid from a prime contractor (MCM) that had omitted price information for seven of nine listed subcontractors. Although MCM has some obvious factual similarities with this case (both involve omitted subcontractor-price information), other critical facts are significantly different. Most important, the public entity in MCM made a discretionary determination that the omitted information (involving most of the subcontractors) was material to the bid, and the reviewing court upheld that factual determination. (Id. at pp. 374-377.) Here, the City made an implied determination that the information (involving only two of 10 subcontractors) was not material, and there is substantial evidence to support this determination (no showing of any unfair competitive advantage). (See Bay Cities, supra, 223 Cal.App.4th at pp. 1197-1199 [emphasizing the "factual component" of the materiality inquiry and the public entity's broad discretion in considering this issue].)
Additionally, in upholding the public entity's rejection of MCM's bid, the MCM court emphasized that MCM "had an actual advantage as the [public entity] gave MCM an opportunity to withdraw its bid without forfeiting its bid bond when it informed MCM that its bid would be considered nonresponsive if it did not provide [the] additional information." (MCM, supra, 66 Cal.App.4th at p. 376.) The MCM court further observed "the failure to state dollar amounts of work to be performed by seven of nine subcontracts" was " 'in the nature of a typographical or arithmetical error' " that would have allowed a bid withdrawal under section 5103. (Id. at p. 377.) The MCM court's discussion also supported that the subcontractor-price information was of relevance to the bidding decision because the public entity intended to use the information to determine which of the subcontractor firms would satisfy the minority/women subcontracting goals for the public contract. (Id. at p. 364.)
These factors are not present here. There is no evidence that the City similarly informed USS that it could withdraw its bid based on the price omission or the failure to timely cure the omission. Additionally, although the failure to include the price information for two subcontractors perhaps resembled a typographical or arithmetical error, section 5103 cannot be invoked unless "[the] mistake made the bid materially different than he or she intended it to be." (§ 5103, subd. (c).) Unlike in MCM, West Coast did not produce any facts showing the failure to list the subcontractor prices would have had any impact on the time, price, quality, or contracting goals of the project. On this record, the slight variance from the specifications (two omitted subcontractor prices) did not make the bid materially different than the bid was intended to be.
B. City Did Not Violate its Own Rules
West Coast's second argument is that even if there was no competitive advantage or other unfairness resulting from the acceptance of this bid, USS's bid was nonresponsive as a matter of law because it violated the City's own specifications in the bid solicitation documents.
The City's bid documents stated that a bidder must identify each subcontractor performing in excess of .5 percent of the total bid and stated in red color that the dollar value of each subcontractor "MUST BE FILLED OUT." This category was the only category that included this capitalized and red-inked admonishment. The bid instructions also stated: "The DOLLAR VALUE of the total Bid to be performed shall be stated for all subcontractors listed. Failure to comply with this requirement shall result in the Bid being rejected as non-responsive and ineligible for award." Although the bid documents also contained other statements suggesting certain general discretion on the part of the City (the use of the word "may" rather than "shall"), the subcontractor-price information was clearly required.
These facts are undisputed. But they do not answer the question whether the City had the authority under its rules to provide the low bidder the opportunity to provide the mandated information within 24 hours of the bid deadline. The record before us supports that the City did have this power.
First, the Municipal Code specifically provides that the City "may waive defects and technicalities in bids or proposals when to do so is in the best interests of the City." (San Diego Mun. Code, § 22.3014.) The City had a reasonable basis to decide that allowing USS to cure the defect served the City's best interests, particularly because USS's price was about $1 million lower than the other bidders and the defect did not concern total bid price or another material matter.
Additionally, section 4104, subdivision (a)(3)(A) specifically provides for this 24-hour cure period (except for name/address/license information), and the City presented evidence that it was standard practice for it to allow contractors this limited time to supplement the non-statutorily required information. Consistent with this practice, the bid specifications stated the City was seeking the subcontractor information "[i]n accordance with the requirements provided in the 'Subletting and Subcontracting Fair Practices Act', Division 2, Part 1, Chapter 4 of the Public Contract Act . . . ," which includes the 24-hour cure provision. (§ 4104, subd. (a)(3)(B).)
To the extent West Coast suggests the City was required to engage in a more formal procedure to "invoke" section 4104, subdivision (a)(3)(A)'s rules, there is no support for this argument. Section 4104, subdivision (a)(3)(B) states that a local entity "may implement" these rules, and the City provides that it has the discretion to apply state law rules in the public bidding process, particularly if a rule would serve the "interest of ensuring an expeditious and fair procedure . . . ." (San Diego Mun. Code, § 22.3002, subd. (b).) Although the City did not specifically cite to section 4104, subdivision (a)(3) in the bid solicitation documents, there is no authority showing it was required to do so, nor are there any facts showing this lack of express notice resulted in prejudice to the bidding contractors.
To establish the City had no discretion to allow USS a brief period to cure the nonmaterial omission, West Coast relies on Pozar v. Department of Transportation (1983) 145 Cal.App.3d 269 (Pozar). In Pozar, Caltrans's bid solicitation required bidders to provide unit prices, quantity, and total prices for the products to be used in fulfilling the contract. (Id. at pp. 270-271.) The bid documents contained a specific rule for resolving "discrepancies between per-unit and unit price totals," stating that in case of a conflict, " 'the item price shall prevail' " absent an ambiguity in the item price. (Id. at p. 271.) Contractor Pozar's bid included a product in which the per-unit price ($20) times the estimated quantity (90 tons) totaled $1,800, but Pozar identified the total item price as $18,000. (Id. at p. 270.) Despite its rules that the unit price controls when there is a discrepancy, Caltrans relied on the given total price ($18,000) to determine that Pozar was not the low bidder. (Id. at p. 271.) After Pozar unsuccessfully sought relief in the trial court, the Court of Appeal issued a peremptory writ, determining that Caltrans was bound to follow its own rules and accept the per-unit price, and by failing to do so Caltrans breached its ministerial duty. (Id. at pp. 271-272.)
We agree that under Pozar, a public entity is obligated to follow its own rules regarding the criteria used to decide the manner in which a contract should be awarded. But Pozar's holding does not extend to the situation where the discrepancy between the solicitation and the bid does not affect an evaluation of the total bid price or any other relevant factor in determining whether the contractor's work would meet contract specifications. The City's bidding documents provided that the City would "determine the low Bid based on the Base Bid alone." The City thus did not need each subcontractor price to calculate the total bid value or to reasonably compare the bids. The City had the discretion to waive and could waive minor deviations from its bid rules pertaining to the timing of the two subcontractor prices.
West Coast's reliance on Baldwin-Lima-Hamilton Corp. v. Superior Court (1962) 208 Cal.App.2d 803 is also unhelpful. In the cited portion of the opinion, the Baldwin court reiterated the well-established rule that bid solicitations on public contracts must be "sufficiently detailed, definite and precise so as to provide a basis for full and fair competitive bidding upon a common standard and must be free of any restrictions tending to stifle competition." (Id. at p. 821.) The bid solicitation documents in this case met this standard.
DISPOSITION
Judgment affirmed. Appellant to bear respondents' costs on appeal.
HALLER, J. WE CONCUR: HUFFMAN, Acting P. J. AARON, J.